Deals



Brooks McDonald Group Plc Acquisition of Spearpoint and Placing


Posted: 16th November 2012 10:20

Brooks Macdonald Group plc ("Brooks Macdonald", "the Group" or "the Company"), the AIM listed integrated wealth management group, today announces the acquisition of Spearpoint (Spearpoint Limited and Spearpoint Retirement Services Limited), a Jersey and Guernsey based provider of discretionary fund management with stock broking and retirement planning capabilities. It is expected that the Acquisition will complete on 19 November 2012.
 
Acquisition of Spearpoint  
 
  • Spearpoint is one of the leading integrated wealth management businesses in the Channel Islands with funds and assets under management of approximately £1.1bn;
  • The Combined Group has discretionary funds under management of approximately £4.5bn (excluding advisory, property and third party administration assets); and
  • Spearpoint is a good synergistic fit with the Group's existing growth strategy, adding important access to an expanding international pensions market.
Terms of Acquisition and Consideration Structure
 
  • Initial consideration of approximately £23.1m on a cash free debt free basis payable in a mixture of cash and equity.
  • Deferred consideration will be payable in cash in November 2014.  If the value of Spearpoint's discretionary funds under management were to remain at approximately their current levels, the Company would expect the deferred consideration to be approximately £4 million.
  • However, based on the Company's growth projections for Spearpoint's discretionary funds under management over the period to November 2014, the Group expects to pay an additional approximate £5m of deferred consideration over and above the £4m figure.
Placing
 
  • The Company proposes to raise £21.5m by way of a vendor placing of 1,869,566 New Ordinary Shares at the placing price of 1,150 pence per share.
  • The net proceeds of the Placing will be used to pay part of the initial consideration.
  • The Placing received strong support from a mixture of existing and new institutional shareholders.
 
Financial Highlights
 
  • The Acquisition is expected to be immediately earnings enhancing.
  • Spearpoint reported pre tax profits of £3.91m on revenues of £11.42m for the year ended 31 December 2011.
 
Chris Macdonald, Chief Executive of Brooks Macdonald Group commented:
 
"The acquisition of Spearpoint is a major step forward for the Group and captures an opportunity we have been seeking for a number of years.  It adds scale, offshore and international capability together with the acquisition of a strong investment management and pensions team.
 
"We look forward to welcoming Spearpoint's clients and staff to Brooks Macdonald. There is a good synergistic and cultural fit with our existing growth strategy and business.
 
"We are confident that the Combined Group will be a leading presence in UK wealth management and that the acquisition will be immediately earnings enhancing."  
 
John Davey, Chief Executive of Spearpoint said:
"We are delighted to be joining the Brooks Macdonald Group. There is a strong fit in terms of investment management style and culture.
"Brooks Macdonald's proven marketing and distribution and well established brand provide us with the tools to focus on growth.
"Everyone at Spearpoint is very excited about the opportunities that becoming part of Brooks Macdonald present." 

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